This Communal Bank is named “Alberto Larraguibel” and consists of 22 entrepreneurs who engage in different businesses such as selling clothes, selling jewelry, selling undergarments, selling caps, repairing bicycles, operating a beauty salon, making curtains, selling trinkets, and preparing salads. All of them are from the city of Temuco.

María, the Communal Bank President, is the woman in the photograph who is seated and wearing an orange jacket. She has been making tablecloths, curtains, and valances for the past two years. María started her business after being awarded a sewing job, which meant that she had to purchase a sewing machine and fabrics. Since starting her business, she has done very well.

María works from the dining room in her home and her schedule varies based on the orders that she has to fulfill. She also works as an interior design consultant for a private firm. María buys her supplies in the same city since the prices are comparable to those of other cities. With this loan, she will buy fabrics, thread, and lace.

María lives with her 21-year-old daughter, who is a university student. She is motivated to continue with her business so that she can fund her education. One of her dreams is to see her daughter finish her degree and pursue a professional career. María says she feels comfortable with and appreciates the services offered by Fondo Esperanza, as well as the trust and conveniences provided by the organization.

Temuco is the capital of Araucanía region. The city is located 670 kilometers to the south of Santiago, the Chilean capital. In the surrounding areas there are a series of lakeside spas (such as Pucón and Villarrica). The nearby nature parks are concentrated with striking plants and animal life. It should be mentioned that half of the residents of the region are of Mapuche descent, an indigenous people that live throughout Chile.

Additional Information

About Fondo Esperanza

Fondo Esperanza (FE) is a private non-profit organization that supports entrepreneurship by providing micro-credit and training to people living in poverty in well over 100 cities throughout Chile. By providing these services, FE aims to improve the living conditions of the entrepreneurs and their families. In 2010, FE provided loans to more than 41,000 entrepreneurs. It utilizes a communal banking model in which groups of 18 to 25 clients meet on regularly and guarantee each other’s loans. The members use their portion of the loan to create or expand their own businesses. In the group meetings, clients receive training though the FE Entrepreneurship School, which enhances clients’ personal and business skills and ability to work in groups.

This is a Group Loan

In a group loan, each member of the group receives an individual loan but is part of a larger group of individuals. The group is there to provide support to the members and to provide a system of peer pressure, but groups may or may not be formally bound by a group guarantee. In cases where there is a group guarantee, members of the group are responsible for paying back the loans of their fellow group members in the case of delinquency or default.

Kiva's Field Partners typically feature one borrower from a group. The loan description, sector, and other attributes for a group loan profile are determined by the featured borrower's loan. The other members of the group are not required to use their loans for the same purpose.